Stella Ann Freeman is having a difficult time deciding whether or not to purchase a new car. How would understanding the concept of opportunity cost help her make a decision?
What will be an ideal response?
Opportunity cost is the value of the best forgone alternative. The opportunity cost of purchasing a new car is the value of what is given up to purchase the car.
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If marginal revenue exceeds marginal cost, to increase its profit the firm will
A) decrease its output. B) increase its output. C) keep its output the same. D) shut down.
Refer to Figure 12-9. Identify the short-run shut down point for the firm
A) a B) b C) c D) d
If prices of both horizontal and vertical goods decrease by 50%,
A) budget constraint will be unchanged. B) slope of the budget constraint will increase. C) slope of the budget constraint will decrease. D) budget constraint will shift outward in a parallel fashion.
Exclusion of which of the following tends to understate the true level of unemployment in the economy?
a. Children. b. Retired persons. c. Students. d. People who do not want to work. e. Discouraged workers.